Why Congress Didn't Extend Unemployment Benefits

Switching gears now to national politics, the U.S. Senate passed a budget deal on Wednesday, following the House, which means the bill goes to the president and most lawmakers headed home for the holidays. Now the bill sets out a blueprint for funding the government through 2015 and avoids another government shutdown. But one thing it does not do is extend long-term unemployment benefits, and that means that 1.3 million jobless people will see their federally funded benefits expire on the December 28. Over the next six months, another 3.6 million people will see their long-term employment checks cut off unless Congress decides otherwise.

We wanted to talk more about this - about why this is happening and what the consequences might be - so we've called, once again, Marilyn Geewax, senior business editor with NPR, back with us. Marilyn, thanks so much for joining us once again.

MARILYN GEEWAX, BYLINE: Hi, Michel.

MARTIN: So could we go back to the beginning? Why did Congress extend this benefits program to begin with?

GEEWAX: All right, well, let's go back even a little bit further to the very, very beginning. This program actually was started during the Great Depression in 1935. So what happened? Lots of people were out of work, they created a pool of money that employers could pay into - when workers get laid off, they can draw some of that money out and help tie themselves over until they can find another job. Well, during good times, the state runs that program and maybe it gives you 13 weeks of benefits. But you remember, we hit into a terrible recession starting in the summer of 2008. Congress looked at how bad unemployment was starting to get and they decided to add more money into that pile.

They took federal tax dollars and turned it over to the states and said 13 weeks isn't cutting it, let's get to 26 weeks. They kept extending it, extending it. It finally got as high as 99 weeks, and that was during the very worst of the recession.

MARTIN: I was going to ask you how these extended benefits are different from the unemployment that you get from the state - or is it different? And how do the two programs work together?

GEEWAX: Well, it's really a kind of a mash up. It's a program that really is private, public, state, federal - so there's money that comes into the coffers from private employers. There is state money thrown in there often as well. But then these federal extended benefits were supposed to help the states out because they knew what hard times people were having. So it's really - it's a blend of all these funds. And the part that they want to cut out now - that Congress is saying enough already - is that federal extension that got you way up to 99 weeks.

Now they have been tapering it down in recent months and years, it's down to a maximum of 47 weeks. So that's down from the worst in 2009. But still, it's a lot - you know, if you lose your job, you've got nearly a year's worth of help if you're in one of these worse hardest hit states where you can get the maximum benefits.

MARTIN: So what was the center of gravity around the decision not to extend these benefits further? Was there a serious philosophical disagreement about this? Or was it simply that they ran out of time - if I can say that?

GEEWAX: No. It's not really time issue because it's a fairly simple thing to do - either you're for it or you're against it. And so they really could have included this in the budget deal that they just completed this week.

MARTIN: So how come they didn't?

GEEWAX: So it's really a big philosophical divide. The Democrats say people still need some extra help, it's still really tough out there. There are states where unemployment is still over 9 percent, and they're like, boy, you know, 13 weeks of help is not enough. Twenty-six weeks is not enough for these states that are really hard hit. We've got to keep giving them more money. They also say it stimulates the economy. When people have more money to spend, they send the money and then it helps small grocers, it helps retailers, it helps stop foreclosures. You have more money just to pay the mortgage, whatever. It's good for the economy is their argument.

But Republicans look at it the other way. They say extending these benefits again this year would cost $26 billion. Having a big budget deficit is not good for the economy, so that's money that they would like to save. But also there's this idea that the longer you extend unemployment benefits, the more people will stall, in a sense. That instead of just taking whatever is available to you, you might keep looking and looking because you have this extra grace period. And they say, you know what - the longer you're out of the workforce, the worse it gets for you. Just take the job, move, work nights, whatever you got to do, but get moving already. It's not in your best interest to go months without work.

MARTIN: Can I ask you - briefly - because I do want to hear from some people that we heard from on Facebook 'cause we reached out on Facebook to ask people who are losing their unemployment benefits to share their experiences. I do want to hear a little bit. But for this budget deal to have gone forward, Democrats had to have supported it. So why were they willing to - even you say that they philosophically believe that extending unemployment benefits was the right thing to do - why were they willing to let the budget deal go forward despite the fact that the extension was not agreed to?

GEEWAX: Both the president and Senate Majority Leader Harry Reid have talked about that. And they say, you know, we needed to get this done. We wanted to get a budget deal out of the way. Everybody had to give up something. This was one of the things we had to give up. Harry Reid promises that have the Senate return to this issue early in January. So they're still holding out hope that in January something might improve.

MARTIN: We heard - as I mentioned - on Facebook we asked people who were losing their unemployment benefits to share their experiences. We heard from a number of people as you might imagine, and we always do when we ask about this. Just one person, Jessica Shay (ph), who lives in New Jersey, wrote to say that she lost her job at a university last summer. Her state benefits are exhausted and her extended federal benefits will run out in three weeks. And she says, quote, I've always prided myself on being a hard worker. I want to work. When I hear that Congress will not extend the Emergency Unemployment Compensation program in December, I feel terrified for my family. Is that a common sentiment that...

GEEWAX: Yes.

MARTIN: That many people feel that they really don't know what to do in a situation like this?

GEEWAX: I called Jessica and talked with her about this. And it's - she sort of perfectly illustrates the philosophical divide. On the one hand, you could say, gosh, this was a person who really has been a hard worker. She wants to find a job. She hasn't been able to find anything. If you cut her off, what if they lose their home? What if they lose their car? They've got four kids. This is a woman with a husband. They need that second income to maintain themselves. New Jersey would not be better off with her losing her home.

But Republicans could say, you know, it's long enough now. There are some night jobs. She is starting to look at taking an evening shift. And their opinion would be, OK, that's right, you do need to - you can't have what you want or what you used to have. You need to adjust - move, take a different kind of job, retrain. It's time to adjust.

MARTIN: Is this situation settled? Is there any chance that this issue will be revisited?

GEEWAX: Yes, as I say, the Democrats feel like they can still push this in January. But I don't know, it's a pretty tough one. Trying to add another $26 billion in spending at this point would be pretty hard to do. I think maybe there's two parts to this - they want - Democrats want to also push a hike in the minimum wage. That part might actually be a little easier to push because it wouldn't directly involve tax dollars.

MARTIN: Marilyn Geewax is a senior business editor with NPR. And she joined us once again in our Washington, D.C. studios. Marilyn Geewax, thanks so much for joining us once again and happy holidays as always.